L&T Infotech Limited, one of the large IT services provider in the country, on January 19 reported a consolidated profit after tax (PAT) of Rs 612 crore for the quarter ended December 2021, up 18 percent from Rs 519 crore in the corresponding quarter of the last financial year. The company had reported a profit of Rs 552 crore in the September 2021 quarter.
Consolidated revenue came in higher by 31 percent at Rs 4,138 crore for the quarter from Rs 3,153 crore in the year-ago period. Revenues in the previous quarter were Rs 3,767 crore.
The dollar revenues came in at USD 553 million, growing by 29.3 percent year-on-year and by 8.7 percent quarter-on-quarter.
Growth in constant currency revenues was 30.1 percent on year and 9.2 percent on quarter.
“We are happy to report 9.2% QoQ revenue growth in constant currency. This is our best ever quarterly sequential growth since listing”, said Sanjay Jalona, Chief Executive Officer & Managing Director.
“Our ongoing revenue momentum sets us up to deliver our highest year-over-year growth as a publicly listed company. We continue to have incredible conversations with our customers on their digital transformation journeys”, he added
Revenue grew on the back of the growth momentum of Q2FY22 which continued in the third quarter and broad-based demand across verticals led by increased discretionary spending on IT transformation and cloud roadmap. Margins continue to remain under pressure due to supply-side issues.
Business & Geographical Performance
The growth in revenues was all round as all the business verticals of the company grew in double digits compared to last year.
BFSI (Banking, Financial Services and Insurance) continues to be the mainstay for the company contributing 32.8 percent to the total revenues. It witnessed a robust YoY growth of 38.4 percent and 9.7% QoQ.
Contribution from manufacturing vertical was 17 percent to the revenues. The business grew by 30.4 percent on year and 18.3 percent sequentially.
Insurance business contributed 13.3 percent to the revenues by growing at 14.3 percent YoY and 9.7% QoQ. High-tech, media and entertainment business grew by strong 44.5 percent YoY and 3 percent QoQ while contributing 11.8 percent to the overall business.
CPG (Consumer Product Group), Retail & Pharma, Energy & Utilities and others also witnessed double digit yearly growth.
Double digit growth was witnessed in all service offerings of the company. Its main offerings of ADM & Testing and Enterprise Solutions contributed 33.5 percent and 31.4 percent respectively to the total revenues. They both grew by 28.9 percent and 29.1 percent respectively.
North America continues to be the main business generator for the company with 66 percent of the total revenues coming from that region. The growth in the region was 25.7 percent year on year and 6.3 percent on a sequential basis.
Europe witnessed a YoY growth of 26.7 percent and 6.4 percent QoQ while its contribution to the total revenues was at 15.8 percent.
The company was able to generate lot of business in India during the quarter as it’s India business witnessed a steep 45.1 percent YoY and 58.4 percent QoQ growth. The contribution from India improved from 6.6 percent in previous quarter to 9.6 percent in this quarter.
The growth in Rest of World compared to last year was 49.5 percent. On a quarterly basis however, the region witnessed a decline of 4.8 percent during the quarter.
The company’s top 20 clients contributed 55.5 percent of total revenues, a growth of 9.6 percent on quarter and 25.8 percent on annualized basis.
Margins
The supply side pressures continue to adversely impact the margins on a yearly basis as EBITDA margins for the quarter contracted by 310 bps to 20.1 percent compared to 23.2 percent last year. On a sequential basis however, there was a margin expansion of 60 bps.
EBIT (earnings before interest and tax) margins came in at 17.9 percent for the quarter compared to 20.6 percent last year and 17.2 percent in the previous quarter.
Net margins for the quarter stood at 14.8 percent compared to 16.5 percent in the same period last year and 14.6 percent in the previous quarter.
New Client Additions
The company added 27 new clients during the quarter, taking the total number of active clients to 476.
It added 1 new client in USD 50 million+ bucket, 2 clients in USD 5 million+ bracket and 7 clients were added in USD 1 million+ category.
Utilization & Headcount
The employee utilization during the quarter was impacted due to furloughs and was recorded at 81.4 percent excluding trainees. Including the trainees, the utilization level was 80.3 percent. During the previous quarter, the levels were 83.7 percent and 81.6 percent respectively.
The total headcount at the end of the quarter stood at 44,200 compared to 42,382 employees at the end of the previous quarter.
The LTM (last twelve month) attrition for the company during the quarter jumped to 22.5 percent from 19.6 percent in the previous quarter.
The L&T Infotech stock closed at Rs 6,697, down Rs 172.5, or 2.5 percent, on the National Stock Exchange on January 19. The stock has generated returns of 64 percent during the past year but is down 9 percent in this financial year. In the past month, the stock has slipped 4 percent.
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